Economic News From P. Poroshenko5
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Economic News From P. Poroshenko

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Ukraine is reconstructing its economic model under the needs of the President-Oligarch. The new phenomenon of “export substitution” is developing in the country by leaps and bounds.

Written by Daniel Deiss and translated by Carphato-Russian exclusively for SouthFront

On October 1, 2015, Russia forbade transit through its territory of railcars of the state enterprise “Ukrainian State Center for Railway Refrigerated Transport Ukrreftrans”. The head of Ukrkondprom Association, Alexander Baldynyuk, reported this on Facebook. This decision was adopted in response to the actions of the State Administration for Railway Transport of Ukraine (Ukrzaliznytsya) which at the end of September, 2015 ceased to accept for transport loads in the railcars belonging to the Russian First Freight Company (PGK).

Earlier, also within the symmetrical measures, Russia suspended transit, to Central Asian republics, of separate goods of the Ukrainian production, in particular, chicken meat and confectionery production from the Roshen concern.

The trade war begun by Ukrainian management is causing significant damage to producers and sellers. But, in the new oligarchical republic, not all subjects of business have equal standing.

In early summer, representatives of the Ukrainian confectionary concern Roshen, with personal interrnediation by President P. Poroshenko, addressed officials of the administration of President of Uzbekistan I. Karimov with a proposal to organize Roshen production directly in Uzbekistan.

At the end of July, a franchise worth USD $3 million was purchased by an Uzbek company to open production of the Roshen brand in Uzbekistan. Now shops of the Uzbek ‘Roshen’ are already operating in various regions of the country.

This is an excellent business maneuver of the Ukrainian concern under transit restriction conditions provoked by its owner. In fact, why look for ways to deliver to Uzbekistan confectionery production, chicken meat, and other food produced by Ukrainian workers at Ukrainian factories? Who will allow re-establishing relations with the Russian Federation? Simpler to get 3 million bucks of payoff at once by transferring the brand name, product formula, and equipment, and then down the road get a percent of the profit. The Uzbek workers will successfully replace Ukrainian ones — whom President Poroshenko, evidently, will free up for the next wave of mobilization.

Such effective management in style of modern capitalism is a comprehensive answer to A. Baldynyuk’s question/exclamation: “Railway transit for Ukrainian goods through Russia is over, it seems! Russia forbids transit of Ukrreftrans railcars through its territory. This will finish off the positions of our exporters in the traditional markets of Central Asia, the Xinjiang – Uigur autonomous region of China, and Mongolia. It is strange that our authorities do not know anything about this”.

The authorities know, and they suggest that Ukrainian business sell a “franchise” on chicken meat and cabbage to Uzbeks, Mongols, and Uyghurs … As it turned out, Europe does not need either chicken meat or a “franchise”.